Question 1

To best evaluate,from a financial standpoint,an IT investment whose benefits cannot be firmly established in advance,you would use:
A)capital budgeting.
B)the real option pricing model.
C)a scoring model.
D)the net present value.

Accepted Answer

When benefits of an IT investment cannot be firmly established in advance, it can be difficult to use traditional financial evaluation methods such as capital budgeting or net present value. In this case, the real option pricing model may be a better choice as it allows for flexibility and uncertainty in future outcomes, which is common in IT investments. A scoring model could also be used, but it may not fully capture the financial implications of the investment.

Question 2

The organizational activities working toward the adoption,management,and routinization of a new information system are called
A)production.
B)maintenance.
C)implementation.
D)acceptance.

Accepted Answer

Implementation refers to the process of introducing a new information system into an organization and making it operational. This includes activities such as training users, converting data, and configuring the system to meet organizational needs. It also involves managing the change that the new system brings, as well as ensuring that the system becomes part of the routine business processes of the organization. Production and maintenance are ongoing activities that occur after the system has been implemented, while acceptance refers to the willingness of users to use the new system, which is part of the implementation process.

Question 3

The central method used in a scoring model is to
A)inventory all of the organization's information systems projects and assets.
B)perform a weighted comparison of the criteria used to evaluate a system.
C)survey a large sample of managers on their objectives,decision-making process,and uses and needs for data and information.
D)interview a small number of top managers to identify their goals and criteria for achieving success.

Accepted Answer

The central method used in a scoring model is to perform a weighted comparison of the criteria used to evaluate a system. This involves assigning weights to different evaluation criteria based on their relative importance and then scoring each system on each criteria. The scores are then multiplied by the weights and summed up to get an overall score for each system, which can be used to rank and compare different systems.

Question 4

The project risk will rise if the project team and the IS staff lack
A)legacy applications as a starting point.
B)good equipment.
C)the required technical expertise.
D)financial studies and plans.

Accepted Answer

Technical expertise is crucial for executing a project successfully, and lacking it can lead to significant project risks. Legacy applications, good equipment, and financial studies and plans are also important, but technical expertise is essential.

Question 5

One example of an implementation problem is
A)poor user interface.
B)inadequate user training.
C)project running over budget.
D)changes in job activities and responsibilities.

Accepted Answer

Inadequate user training can lead to difficulties in implementing a system or project, as users may not know how to properly utilize the new technology. This can result in errors, decreased productivity, and frustration among employees. Poor user interface, project running over budget, and changes in job activities and responsibilities are all potential issues that can arise during implementation, but they are not necessarily implementation problems in and of themselves.

Question 6

Which method would you use is used to develop risk profiles for a firm's information system projects and assets?
A)information systems plan
B)scoring model
C)portfolio analysis
D)CSF

Accepted Answer

The answer of Which method would you use is used...

Question 7

Which of the following is NOT one of the activities of the systems analyst?
A)acting as a change agent
B)communication with users
C)mediating between competing interest groups
D)formulation of capital budgeting models

Accepted Answer

The formulation of capital budgeting models is not generally considered to be a direct responsibility of the systems analyst. Rather, this task is more closely associated with financial management and accounting functions. The other activities (acting as a change agent, communicating with users, and mediating between competing interest groups) are all critical components of the systems analyst's job duties.

Question 8

According to your reading of the chapter,change management is a process that
A)should be addressed before a project is developed.
B)begins when a project is implemented.
C)is used primarily to mandate user acceptance.
D)must be addressed in all systems development.

Accepted Answer

The answer of According to your reading of the chapter,change...

Question 9

You have been hired by a pharmaceutical company to evaluate its inventory of systems and IT projects.Which types of projects would be best avoided?
A)any high risk projects
B)any low-benefit projects
C)all high-risk,low benefit projects
D)None,any project might be beneficial.

Accepted Answer

High-risk, low benefit projects should be avoided because they have a higher likelihood of failure or overspending with little impact on the company's objectives. Choosing to invest in such projects would be wasteful and divert resources and attention from more beneficial projects. It is always important to prioritize the projects that offer the most direct value and impact to the company's goals.

Question 10

The criteria used for evaluation in a scoring model are usually determined by
A)lengthy discussions among the decision-making group.
B)a CSF analysis.
C)the IS steering committee.
D)systems analysts.

Accepted Answer

The criteria used for evaluation in a scoring model need to be discussed and agreed upon by the decision-making group. These criteria should reflect the organization's goals and objectives, which can only be determined through communication and discussion among the decision-makers. CSF analysis, IS steering committee, and systems analysts may provide useful information in identifying criteria, but they cannot determine them on their own. Therefore, lengthy discussions among the decision-making group are the best approach to identify the criteria for a scoring model.

Question 11

In using a portfolio analysis to determine which IT projects to pursue,you would
A)select the most low-risk projects from the inventory.
B)limit work to those projects with great rewards.
C)select only low-risk,high-reward projects.
D)balance high-risk,high reward projects with lower-risk projects.

Accepted Answer

Using portfolio analysis means balancing the risks and rewards of IT projects. Therefore, it is best to select a mix of high-risk, high-reward projects and lower-risk projects to create a diversified portfolio. This approach helps to mitigate risks while still allowing for potential high returns on investment.

Question 12

The worth of systems from a financial perspective essentially revolves around the issue of
A)CSFs.
B)adherence to information requirements.
C)asset utilization.
D)return on invested capital.

Accepted Answer

The worth of systems from a financial perspective is best measured by the return on invested capital, or the amount of profit generated by the system relative to the amount of money invested in its development and operation. This metric considers both asset utilization and adherence to information requirements, but ultimately focuses on financial performance. CSFs (critical success factors) are important to consider in system design and implementation, but do not directly relate to financial worth.

Question 13

When using a capital budgeting method in measuring the worth of an information system,which of the following related costs would you use to assess the cash inflow?
A)increased sales of products
B)hardware and software expenditures
C)labour expenditures
D)reduced costs in production and operation
E)both A and D

Accepted Answer

When measuring the worth of an information system using a capital budgeting method, the related costs that would be used to assess the cash inflow are the increased sales of products and the reduced costs in production and operation. These two factors are typically the main drivers of cash inflows resulting from the implementation of an information system. Therefore, the best choice would be E, which includes both A (increased sales of products) and D (reduced costs in production and operation).

Question 14

The level of a project's risk is influenced primarily by
A)project size,project structure,and the level of technical expertise.
B)project cost,project scope,and the implementation plan.
C)project scope,project schedule,and project budget.
D)project size,project scope,and the level of technical expertise.

Accepted Answer

The answer of The level of a project's risk is...

Question 15

ROPMs value information systems similar to stock options,in that
A)ROPMs can be bought and sold like stocks.
B)a company's worth can be evaluated by the worth of their ROPMs.
C)initial expenditures on IT projects are seen as creating the right to pursue and obtain benefits from the system at a later date.
D)expenditures and benefits from IT projects are seen as inflows and outflows of cash that can be treated themselves like options.

Accepted Answer

ROPMs (Real Options Premiums) and stock options have similarities in that they both involve the concept of options. ROPMs grant the right, but not the obligation, to take specific actions related to an IT project at a later point in time, similar to how stock options grant the right, but not the obligation, to purchase or sell a stock at a later point in time. The initial expenditure on IT projects can be seen as creating the right to pursue and obtain benefits from the system at a later date, which is similar to how buying a stock option creates the right to purchase or sell a stock at a later date. Therefore, option theory can be used to evaluate the potential value of IT projects. However, ROPMs themselves cannot be bought or sold like stocks, and the worth of a company cannot be evaluated solely based on their ROPMs. Expenditures and benefits from IT projects are not treated as inflows and outflows of cash that can be treated like options.

Question 16

In working with ROPMs and options valuation,a financial option is a(n)
A)obligation to purchase an asset at a later date at a fixed price.
B)obligation to either purchase or sell an asset at a later date at a strike price.
C)right to purchase an asset a later date at a strike price.
D)right to purchase or sell an asset a later date at a fixed price.

Accepted Answer

A financial option gives the holder the right, but not the obligation, to buy or sell an asset at a predetermined price (the strike price) before or at the expiration date.

Question 17

________ are all intangible benefits of information systems.
A)Improved asset utilization,increased organizational learning,and improved operations
B)Reduced workforce,lower outside vendor costs,and increased productivity
C)Increased productivity,reduced workforce,and increased job satisfaction
D)Lower operational costs,improved resource control,and more information

Accepted Answer

Improved asset utilization, increased organizational learning, and improved operations are intangible benefits of information systems because they cannot be easily quantified or measured in terms of dollars and cents. These benefits are more long-term in nature and often relate to how well an organization is able to leverage its resources and knowledge to drive better outcomes. These benefits can be difficult to see at first, but they often have a significant impact on an organization's overall success.

Question 18

________ are all tangible benefits of information systems.
A)Improved asset utilization,increased organizational learning,and improved operations
B)Reduced workforce,lower outside vendor costs,and increased productivity
C)Increased productivity,reduced workforce,and increased job satisfaction
D)Lower operational costs,improved resource control,and more information

Accepted Answer

The answer of ________ are all tangible benefits of information...

Question 19

The principal capital budgeting models for evaluating information technology projects are the payback method,the accounting rate of return on investment (ROI),the net present value,and the
A)future present value.
B)internal rate of return.
C)external rate of return.
D)ROPM.

Accepted Answer

The internal rate of return is the most commonly used model for evaluating information technology projects. It takes into account the time value of money and considers the project's cash inflows and outflows over time. The payback method and accounting rate of return on investment are less sophisticated models that do not consider the time value of money. The net present value is a more sophisticated model that considers the time value of money, but the internal rate of return is considered better for evaluating IT projects. The answer D (ROPM) is not a valid option, as there is no such capital budgeting model.

Question 20

Which method is used to assign weights to various features of a system?
A)information systems plan
B)scoring model
C)portfolio analysis
D)CSF

Accepted Answer

The scoring model is a method used to assign weights to various features of a system. It involves creating a matrix and assigning scores to each feature based on its importance, with the sum of the scores equalling 100%. This method is commonly used in decision-making processes where multiple features or options need to be evaluated and compared.

Quiz 14: Project Management, business Value, and Managing Change

To best evaluate,from a financial standpoint,an IT investment whose benefits cannot be firmly established in advance,you would use:

The organizational activities working toward the adoption,management,and routinization of a new information system are called

The central method used in a scoring model is to

The project risk will rise if the project team and the IS staff lack

One example of an implementation problem is

Which method would you use is used to develop risk profiles for a firm's information system projects and assets?

Which of the following is NOT one of the activities of the systems analyst?

According to your reading of the chapter,change management is a process that

You have been hired by a pharmaceutical company to evaluate its inventory of systems and IT projects.Which types of projects would be best avoided?

The criteria used for evaluation in a scoring model are usually determined by

In using a portfolio analysis to determine which IT projects to pursue,you would

The worth of systems from a financial perspective essentially revolves around the issue of

When using a capital budgeting method in measuring the worth of an information system,which of the following related costs would you use to assess the cash inflow?

The level of a project's risk is influenced primarily by

ROPMs value information systems similar to stock options,in that

In working with ROPMs and options valuation,a financial option is a(n)

________ are all intangible benefits of information systems.

________ are all tangible benefits of information systems.

The principal capital budgeting models for evaluating information technology projects are the payback method,the accounting rate of return on investment (ROI) ,the net present value,and the

Which method is used to assign weights to various features of a system?